Tax Deferrals and Changes for COVID-19

The federal and provincial governments have announced a series of tax changes and deferrals for individuals and businesses in light of the challenges of COVID-19.

Businesses:

Property Taxes

The school tax, a significant portion of local property tax bills, will be reduced and effectively cut property taxes by 25%

Late payment penalties have been waived until October 1, 2020, creating a de facto deferral of property tax payments until then

Changing property tax bills will support small businesses who pay property taxes through triple net leases. This reduction in taxes for 2020 will directly result in a lower tax bill passed on to business tenants, and the delay in late penalties will allow landlords to extend flexible payment options for their tenants as well.

Provincial Taxes

Payments for the Employer Health Tax can now be deferred until September 30

Remittance of provincial sales tax (PST), municipal and regional district tax, carbon tax, motor fuel tax and tobacco tax are also deferred until September 30

The scheduled increase to the carbon tax rate, and application of PST to e-commerce transactions and sweetened and carbonated drinks, will be delayed

Federal Income Tax

All businesses can now defer, until after August 31, 2020, the payment of any federal income tax amounts that become owing on or after March 18, 2020 and before September 2020.

This relief would apply to tax balances due, as well as installments, under Part I of the Income Tax Act.

No interest or penalties will accumulate on these amounts during this period.

The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. For the vast majority of businesses, the Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives

GST Remittance

Businesses now have until June 30 to remit GST collected in their businesses to the federal government. Specifically:

Monthly filers have until June 30 to remit amounts collected for the February, March and April 2020 reporting periods;

Quarterly filers have until June 30 to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and

Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have until June 30 to remit amounts collected and owing for their previous fiscal year and installments of GST/HST in respect of the filer’s current fiscal year.

Customs Duty and Sales Tax for Importers

Imported goods by businesses are generally subject to the GST, at a rate of 5 per cent, as well as applicable customs duties, which vary by product and country of origin.Typically, payments owing for customs duties and the GST on imports are due before the first day of the month following the month in which the Statements of Accounts are issued, but now the payment deadlines for statements of accounts for March, April, and May are being deferred to June 30, 2020

Individuals:

For individuals (other than trusts), the income tax filing due date will be deferred until June 1, 2020. But this is only an advantage if you expect the owe taxes — do not delay if you expect a refund!

If you do owe taxes after this later filing date, The Canada Revenue Agency will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax